News

FG Pays N1 Trillion Monthly As Petrol Subsidy — Pinnacle Oil MD

Published

6 months ago

March 2, 2024

In a revelation that underscores the ongoing challenges in Nigeria’s oil sector, Pinnacle Oil and Gas Limited has disclosed that the country is incurring about N1 trillion every month on petrol subsidies.

This disclosure was made by the Managing Director/CEO of the indigenous oil and gas company, Robert Dickerman, during the Nigeria International Energy Summit (NIES) held in Abuja.

Despite the government’s efforts towards deregulation in the downstream sector, the persistence of such a hefty subsidy indicates a significant financial burden on the nation’s economy.

The subsidy mechanism, intended to make petrol affordable for Nigerians, has inadvertently resulted in the product being cheaper within the country compared to neighbouring nations.

This price disparity has been identified as a key driver for the smuggling of petrol across borders, further complicating the subsidy issue.

Speaking at the forum’s panel session six, which focused on Nigeria’s Downstream Sector, Dickerman highlighted the paradox that, despite substantial progress in the industry, the massive subsidy is a clear indication of the challenges still facing Nigeria’s oil and gas sector.

He said the situation not only affects the government’s finances but also impacts the operational dynamics of companies within the sector, like Pinnacle Oil and Gas, which operates across the entire downstream value chain.

Dickerman stated that the continued payment of subsidies at such a scale raises questions about the sustainability of such expenditures and the need for more effective policies to address the underlying issues.

He said, “Nigeria has a long history of allocating resources to oil and gas production at the expense of most other economic and social programs. To balance this, there has been a long-standing policy to mitigate consumer costs via palliatives such as fuel and food subsidies.

“But one of the net effects of oil money is underinvestment in local production, manufacturing and other value-added activities that could generate foreign currency through exports. There has also been a large under investment in the maintenance and upgrade of existing infrastructure including electricity, roads, health care, water, waste, education and financial infrastructure such as consumer credit.

As a result, we have a huge negative trade deficit, except for crude oil and LNG, and our banks are not sufficiently capitalized to support significant new capital programs.

“With legacy monetary policymaking currency exchange difficult, we desperately need Foreign Investment. This is a reality. So the best policy during this time of crisis is a national policy to transform our economy/regulations/laws to accommodate and encourage FDI.

“Foreign investors, foreign lenders and government-run DFIs have been very clear about what they want to see: Conservative fiscal policy, tackling corruption, enabling competitive markets, and enforcement of fairness in markets through policy, regulation and the ability to enforce contracts. Keeping that context in mind, I want to point out that there is still a massive subsidy in PMS, albeit in the FX portion of PMS Price, not the global price in dollars.

“The consequences of this subsidy are: The cost of gasoline in Nigeria is the lowest in Africa by far, which encourages smuggling out, further depriving Nigeria of value. Smuggling causes Nigeria to subsidize neighbouring countries even while our economy struggles. The cost is hurting the entire budget, Federal and State, as critical programs cannot be funded to pay this subsidy. It is currently calculated to be about 1 trillion Naira/month.

“Also, with this subsidy in place, ceasing subsidy payments would result in no petrol supply, if there are no refineries producing gasoline. All supplies come from the international market, which will only sell at market prices.

“There is no competition in bulk supply, as only the national champion owned by the government can import. Wholesale and retail prices are set based on their subsidized cost and they determine who gets supply. Without a competitive market, foreign investors are discouraged from investing in this sector in Nigeria.

“The solution to this problem seems obvious, even acknowledging the daily struggles most citizens and companies have today with reduced purchasing power, high inflation, high interest costs and high unemployment that exists today. Short-term palliatives have never resolved long-term issues in any nation at any time in history. We need long-term solutions.”

News

President Tinubu Speaks On Ajuri Ngelale’s Indefinite Leave Request

Published

39 mins ago

September 8, 2024

Kayode Sanni-Arewa

By Kayode Sanni-Arewa

President Bola Ahmed Tinubu’s administration has endorsed Ajuri Ngelale, the President’s Special Adviser on Media and Publicity, indefinite leave request.

Recall Ngelale, in a statement on Saturday, announced an indefinite leave of absence.

He proceeded on the leave to attend to pressing medical matters affecting his immediate family.

In a statement he posted on his general communication WhatsApp platform on Saturday, Ngelale revealed that he submitted a memo to the Chief of Staff on Friday.

He noted that the memo was a means of notifying him of the decision to pause his functions, including his roles as Special Presidential Envoy on Climate Action and Chairman of the Presidential Steering Committee on Project Evergreen.

Ngelale explained that the decision was after consultations with his family due to a worsening medical situation at home.

He expressed hope to return to full-time national service when circumstances permit.

In a statement posted on X by Tinubu’s Special Assistant on New Media, Olusegun Dada and signed by the Presidency, Tinubu approved Ngelale’s request.

Tinubu stated that he fully understands his Chief spokesperson’s reason and sympathizes with the circumstances that have led to this seemingly difficult decision.

The statement read: “The President has received the memo from Chief Ajuri Ngelale, Special Adviser to the President on Media & Publicity and Official Spokesperson of the President as well as Special Presidential Envoy on Climate Action, informing of his decision to proceed on an indefinite leave of absence for personal and health reasons.

“The President accepts his reasons for the leave, fully understands them and sympathizes with the circumstances that have led to this seemingly difficult decision.

“While extending his heartfelt prayers and best wishes to Chief Ngelale and his family during this challenging moment, the President hopes for a speedy recovery and full restoration to health.

“The President notes his tireless efforts and dedication in serving the nation, and thanks him for the remarkable contributions he made in his various capacities, especially in advancing national discourse and leading efforts on climate action and other key initiatives.

“The President wishes him well in all his future endeavors.

“During this period, we kindly ask that the wish for privacy of Chief Ngelale and his family be respected.”

News

Confusion As FG Denies Ownership Of Yacht Spotted In France With Nigerian Flag

Published

44 mins ago

September 8, 2024

Kayode Sanni-Arewa

…says it belongs to an undisvcosed private individual

By Kayode Sanni-Arewa

The presidency, on Saturday, denied ownership of a yacht spotted hoisting Nigerian flag in St-Tropez, a coastal town in France.

There had been reports of a “presidential yacht belonging to the Nigerian government being used for vacation at St Tropez” on social media.

Senior Assistant to President Bola Tinubu on digital and new media, Otega Ogra, in a post on X, said the yacht belongs to a private individual.

The presidential aide said flags used by the president or armed forces do not contain the coat of arms like the one on the yacht.

Ogra said on Saturday, “There have been false claims circulating that a private individual’s yacht was spotted in St. Tropez is a Nigerian government yacht. Here are some points to consider in order to discern the truth.

“The 42m Bennetti yacht currently being shared online has been privately owned for around 5 years since it was constructed.

It is important to note that this specific yacht has no connection or ownership ties to the Nigerian government, president or armed forces. Any claims or assertions suggesting otherwise are simply not true and inaccurate.

“It is not uncommon for luxury yachts to fly the flag of the owner’s country as well as the flag of the country in which they are registered.

“The official Nigerian flag is Green-White-Green without a coat of arms in the middle. Flags representing the Nigerian President or the Armed Forces do not contain a coat of arms in the center. Placing anything in the center of the flag is a clear deviation

News

Constituency Devt: Senator Manu fulfils promise, installs solar energy as alternative source of power for constituents(Photos)

Published

55 mins ago

September 7, 2024

Kayode Sanni-Arewa

By Kayode Sanni-Arewa

In a bid to enhance better life for his constituents, Senator Manu Haruna has facilatated installation of solar energy in Takalafiya community in Bali Local Government Area of Taraba State.

Senator Manu who represents Taraba Central Senatorial District in the National Assembly fulfilled his promise of ensuring the energy needs of his constituents are adequately taken care of.

This initiative reflects his unwavering commitment to addressing the energy needs of his constituents by providing a reliable and sustainable power source.

The solar energy project is expected to improve the quality of life in the community, enabling access to electricity for homes, schools, and local businesses, while also promoting environmental sustainability.

This project is part of Senator Haruna’s broader efforts to enhance infrastructure and development in Taraba Central.

Manu is also working tirelessly to make sure areas not connected to the national grid are connected within the shortest period possible.